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Transcript of ISSUES IN THE TRANSPORT SECTOR - AITDaitd.net.in/pdf/4/7. Issues in the Transport Sector.pdf ·...
ISSUES IN THE
TRANSPORT SECTOR
G Raghuram
Indian Institute of Management
Ahmedabad
IDR GR/IIMA
Issues
Transport demand
Spatially imbalanced growth of transport
demand
Transport myopia
Safety
Wear and tear
Pollution and environmental impact
Congestion
Why myopia
What next?
IDR GR/IIMA
Growth Potential
Transport sector expected to grow at 9%
(assuming GDP growth rate as 7.5% and
multiplier of 1.25)
Freight transport expected to be around
1442 btkms in 2005-06
Passenger transport expected to be around
4065 bpkms in 2005-06
IDR GR/IIMA
Freight Traffic: Modal Split
Air is a maximum of 0.14 btkms
IDR GR/IIMA
Mode 1998-99 2002-03 2003-04
BTKM % Share BTKM % Share BTKM % Share
Road 449 51.7 655 55.2 694 54.1
Rail 284 32.7 356 30.0 384 30.0
Pipeline (max) 70 8.1 80 6.7 86 6.7
Coastal 66 7.6 96 8.1 118 9.2
Total 869 100.0 1187 100.0 1282 100.0
Passenger Traffic: Modal Split
IDR GR/IIMA
Mode 1998-99 2002-03 2003-04
BPKM % Share BPKM % Share BPKM % Share
Road 2034 83.0 2775 83.3 3003 83.4
Rail 404 16.5 543 16.3 581 16.1
Air 11 0.4 13 0.4 14 0.4
Coastal
(max) 1 - 1 - 1 -
Total 2450 100.0 3332 100.0 3599 100.0
Insufficient Resource
Allocation
Poor Policy Formulation
and Implementation
Poor
Management
Uneven Distribution
of Transport Demand
Insufficient
Transport Capacity
PollutionWear and TearSafety
Poor MaintenancePoor Controls
Congestion
(Time)
Transport Myopia
IDR GR/IIMA
Safety
Road Deaths and Vehicles, 1996
Country Vehicles/km
of Road
Road deaths/10,000
Vehicles each year
Britain 67 1.5
Netherlands 65 1.7
Germany 62 2.1
France 36 3.2
Belgium 32 3.2
India* 10 20.8
IDR GR/IIMA
Safety
1961 1996 2003
Road deaths 5,547 74,600 86,000
Vehicles (‘0000) 66.4 3,378.6 6,703.3
Road deaths/10,000 vehicles 83.5 22.1 12.8
MTW (‘0000) 8.8 2,325.2 4,752.5
Percentage of MTW 13 69 71
Passenger kms (bpkms) 181 1,400-
1,600
2,800-
3,000
Road deaths/bpkms 30.6 53.3-46.6 30.7-28.7
IDR GR/IIMA
Wear and Tear
Economic losses expected to be about Rs
200 to 300 bn/annum (about 2% of the
GDP) in the late 90s
Loss of about Rs 7,000/road using
vehicle/year
IDR GR/IIMA
Pollution Impact
Premature Death due to Ambient Air Pollution exceeding WHO
standard
2979
254
4477
5726
7491
1894
863
1851
0
2000
4000
6000
8000
CITY
Nos
AHMEDABAD
BANGLORE
BOMBAY
CALCUTTA
DELHI
KANPUR
MADRAS
VARANASI
IDR GR/IIMA
Source: World Bank, 1995
Congestion: Roads
Average speed of truck: 250 kms/day
compared to 600 kms/day in developed
countries
IDR GR/IIMA
Congestion: Railways (2005-06)
Average wagon turn-round time in Railways: 6.2 days, of which only 30 hours was the revenue earning run over an average lead of 661 kms
Average speeds of mail/express and freight trains: 47 kmph and 23 kmph (2004-05) as compared to maximum speeds of 100 kmph and 75 kmph respectively. (100 kmph for container wagons)
IDR GR/IIMA
Congestion: Ports (2004-05)
Average turn-round times is 3.4 days as
compared to the international average of
1.0 days
Average cost of congestion at major ports in
2003-04 is Rs 19.2 billion (18,222 port calls
* average ship standing charge of
$10,000/day * additional 2.4 days = $
437.30 million)
IDR GR/IIMA
Bureaucratic mindset in managing organisations
which either have to create, maintain, or deliver
“Infrastructure”
Deep rooted hierarchy orientation leading to
additional tensions of administrative cadres often
occupying more senior positions than those coming
from the technical cadres (eg ports and road
transport corporations)
Why Myopia
IDR GR/IIMA
Why Myopia
Abdication of authority and lack of perceived
authority by the top management (eg Indian
Railways)
Immature and “feudal” outlook (Civil Aviation
minister being pulled up by Lok Sabha for the
delay of a flight in which the speaker and a few
other MPs from Andhra were travelling, TOI -
8/8/2000)
Repetitive examination of issues without any
implementation of solution IDR GR/IIMA
Transport Scenario
Increasing – Share of road transport
– Urbanization
– Use of personalized transport
– Energy intensity of transport
– Concern for safety
– Sensitivity to environment and public costs
– Imperative to move towards a supply chain perspective
– Gap between supply and demand for multimodal transport infrastructure and services
– Commercial orientation of infrastructure development
– Need for co-ordination through the governmental structure
[Source: Raghuram G, 2006. “A Framework for Analyzing Transport Policies and
ADB’s Sector Assistance Programme”, A Study Sponsored by ADB]
IDR GR/IIMA
Market Environment
Time value of the freight unit or passenger
Need for speedier transport of goods
Need for better distribution networks and
warehouse locations
Need for market segment perspective
– Freight vs Passenger
– Urban vs Rural
Demand for improved service performance
IDR GR/IIMA
Bulk Industrial Consumer
Durable
Consumer Goods
Value Addition (VA) Low High
Consumer Type Intermediary Final Consumer
% of Logistics Costs as
Proportion to VA
High Low
Customer Sensitivity to
Availability
Low High
Framework to Segment Users
•At long distance level, work, tourism, and social networking
are key drivers.
•At short distances including intra-urban, work, school,
shopping, entertainment, and social networking are key drivers.
IDR GR/IIMA
Challenges
Channelize investments that have
multimodal benefits
Introduce competition
Accountability and autonomy via
privatization
Unbundling
Risk management
IDR GR/IIMA
Areas for Improvement
Asset creation efficiency
Asset management efficiency
Service delivery efficiency and
effectiveness
IDR GR/IIMA
Approach to Transport
Infrastructure Development
Unbundling
Cherry picking: cross-subsidies and subsidy
Pricing
Low investment approaches to improving
infrastructure quality and capacity
Land acquisition and management
IDR GR/IIMA
Approach to Transport
Infrastructure Development
Coordinated inter-sectoral development and
centre-state issues
Common carrier versus captive investment
Technology issue
Regulatory framework
Other substantive “checks and balances”
IDR GR/IIMA
System of State Involvement
IDR GR/IIMA
Infrastructure Owner Contractor
Ownership and asset creation
Right of Way
Terminals
Rolling stock and equipment
Services Principal Agent
1. Maintenance
- Right of way
- Terminals
- Rolling stock and equipment
2. Operations
- Right of way
- Terminals
- Rolling stock and equipment
3. Customer services
- Basic services
- Special services
System of State Involvement
IDR GR/IIMA
System of State Involvement
Regulation
1. Licensing
2. Environmental impact
3. Safety
4. Pricing
5. Service levels
6. Dispute Resolution
IDR GR/IIMA
For each mode
And further segmentation possible based on market
considerations
Passenger vs Freight
Urban vs Rural
Domestic vs International
System of State Involvement
IDR GR/IIMA
IDR GR/IIMA
Transport Sector Components and Involvement of the State and Private Sector:
INFRASTRUCTURE Ownership
Air Rail Road Water
Right of Way (State
controlled)DGCA, AAI
(State controlled)Indian Railways
(State controlled)NHAI, PWD, UrbanAdministrations, LocalGovernments, Defense
(State controlled)Major Ports - Govt. of India, StateMaritime Boards, Port Directorates
Terminals (State
controlled)AAI, Defense
(State controlled)Indian Railways,Large Industries forCaptive Sidings
(Open to all)SRTUs, LargeIndustries, TruckingCompanies, etc
(Partly Open)Major Ports - Govt. of India, StateMaritime Boards, Port Directorates,Some Private and Captive Ports
Rolling Stock and
Equipment
(Open to all)IA, AI, Other
Private Airlines
(State controlled)
Indian Railways(Open to all)SRTUs, Private Vehicle
Owners
(Open to all)
SCI, Great Eastern, Essar & Others
IDR GR/IIMA
SERVICES Maintenance
Air Rail Road Water
Right of Way - NA - (State controlled)Indian Railways
(State controlled)NHAI, PWD, UrbanAdministrations
(State controlled)Major Ports - Govt. of India, StateMaritime Boards, Port Directorates
Terminals (State
controlled)
AAI
(State controlled)Indian Railways,Large Industries for
Captive Sidings
(Open to all)SRTUs, LargeIndustries, Trucking
Companies, etc
(State controlled)Major Ports – Govt. of India, StateMaritime Boards, Port Directorates,
Some Private and Captive Ports
Rolling Stock and
Equipment
(Open to all)IA, AI, OtherPrivate Airlines
(State controlled)Indian Railways
(Open to all)Innumerable Small scalegarages, Large organizedwork shops for SRTUs,few private sector large
workshops
(Open to all)Port Dry Docks, HSL, CSL,Chokhani & Others
IDR GR/IIMA
SERVICES Operations
Air Rail Road Water
Right of Way (State
controlled)DGCA, AAI
(State controlled)
Indian Railways(State controlled)
Police Department incase of high trafficdensity
(State controlled)
Major Ports - Govt. of India, StateMaritime Boards, Port Directorates,Light House Authority
Terminals (State
controlled)
DGCA, AAI
(State controlled)Indian Railways,Large Industries for
Captive Sidings
(Open to all)SRTUs, LargeIndustries, TransportCompanies, Control and
State WarehousingCorporation
(Partly open)Major Ports - Govt. of India, StateMaritime Boards, Port Directorates,Some Private and Captive Ports,
Stevedores, Agents, etc
Rolling Stock and
Equipment
(Open to all)IA, AI, PrivateAirlines
(State controlled)Indian Railways
(Open to all)SRTUs, Private VehicleOwners
(Open to all)SCI, Great Eastern, Essar & Others
IDR GR/IIMA
SERVICES Customer Services
Air Rail Road Water
Basic Services (Open to all)
IA, AI, PrivateAirlines
(State controlled)
Indian Railways(Open to all)
SRTUs, Private BusOperators, TCI, PatelRoadways, ForwardingAgents, etc
(Open to all)
Brokers, Chartering Agents,Forwarding Agents
Special Services (Open to all)IA, AI, Private
Airlines
(State controlled)
Indian Railways(Open to all)SRTUs, Private Bus
Operators, TourOperators, TCI, PatelRoadways, ForwardingAgents, etc
(Open to all)Brokers, Chartering Agents,
Forwarding Agents
Regulation
Air Rail Road Water
LicensingDGCA IR RTO DG Shipping
Environmental
Impact
DGCADepartment ofEnvironment
RTO DG Shipping
Safety DGCACRS Traffic Police DG Shipping
Pricing- Parliament
Railway RatesTribunal,
- DG Shipping, TAMP
Service LevelsDGCA IR, Railway Claims
Tribunal- DG Shipping
IDR GR/IIMA
Sectoral Issues: Air
IDR GR/IIMA
Sectoral Issues: Rail
IDR GR/IIMA
Sectoral Issues: Road
IDR GR/IIMA
Sectoral Issues: Road
IDR GR/IIMA
Sectoral Issues: Ports
IDR GR/IIMA
Sectoral Issues: Shipping
IDR GR/IIMA
Sectoral Issues: Pipelines
IDR GR/IIMA
Sectoral Issues: Multimodal
Transport
IDR GR/IIMA
THANK YOU
Congestion: Railways (2003-04)
Average wagon turn-round time in Railways:
6.7 days, of which only 30 hours was the
revenue earning run over an average lead of
684 kms
Average speeds of mail/express and freight
trains: 47 kmph and 23 kmph as compared to
maximum speeds of 100 kmph and 75 kmph
respectively. (100 kmph for container wagons)
IDR GR/IIMA
Congestion: Railways (2002-03)
Average wagon turn-round time in Railways:
7.0 days, of which only 28 hours was the
revenue earning run over an average lead of
681 kms
Average speeds of mail/express and freight
trains: 49 kmph and 24 kmph as compared to
maximum speeds of 100 kmph and 75 kmph
respectively. (100 kmph for container wagons)
IDR GR/IIMA
Congestion: Ports (2003-04)
Average turn-round times is 3.5 days as
compared to the international average of
1.0 days
Average cost of congestion at major ports in
2003-04 is Rs 20.6 billion (18,750 port calls
* average ship standing charge of
$10,000/day * additional 2.5 days = $
468.75 million)
IDR GR/IIMA
Congestion: Ports (2002-03)
Average turn-round times is 3.7 days as
compared to the international average of
1.2 days
Average cost of congestion at major ports in
2002-03 is Rs 15 billion (16,500 port calls *
average ship standing charge of $8,000/day
* additional 2.5 days = $ 330 million)
IDR GR/IIMA